Finland's Financial Supervisory Authority (FIN-FSA) published its assessment of the financial position and key risks across the Finnish financial sector in the first half of 2025, finding that banks, insurers and employee pension institutions remained strongly capitalised through a volatile operating environment. The update flags deteriorating profitability from falling net interest income, continued strain in open-end real estate funds, and a sharp rise in payment scams and fraud requiring heightened preventive measures. At end-June 2025, the banking sector’s Common Equity Tier 1 capital ratio was 17.8% (18.2% at end-2024) and the total capital ratio was 20.8% (22.1%), with the decline influenced by share buybacks and a regulatory change affecting capital requirement calculations. Non-performing loans remained among the lowest in Europe, but non-performing corporate loans increased in the second quarter, largely reflecting weaker construction-sector exposures, while liquidity stayed stable amid record household deposits and easing funding costs. Employee pension institutions reported a solvency ratio of 128.9% and a solvency position of 1.6, with a 1.8% investment return after two quarters and equity allocations rising to 53.1%; non-life and life insurers’ solvency ratios stood at 248% and 224%. The domestic fund sector’s net asset value recovered to nearly EUR 210 billion in June and recorded a first-half result of EUR 112 million, while investment firms continued to meet solvency and liquidity requirements despite lower profitability. On supervisory work, FIN-FSA is conducting a thematic review of banks’ payment-security features and controls and is investigating whether the most significant supervised entities can recover from a severe ransomware attack.
Finanssivalvonta 2025-09-15
Finland's Financial Supervisory Authority reports strong sector solvency and steps up reviews of payment fraud controls and ransomware recovery
Finland's Financial Supervisory Authority (FIN-FSA) assessed the financial sector's stability in H1 2025, noting strong capitalisation despite volatility. Concerns include declining profitability from reduced net interest income, increased payment scams, and rising non-performing corporate loans, especially in construction. FIN-FSA is reviewing banks' payment-security measures and evaluating recovery capabilities from severe ransomware attacks.